Magazine article American Banker

Fidelity Federal in Calif. Sets $110M Stock Issue to Boost Balance Sheet

Magazine article American Banker

Fidelity Federal in Calif. Sets $110M Stock Issue to Boost Balance Sheet

Article excerpt

In a bid to shore up its ailing balance sheet, Fidelity Federal Bank has notified thrift regulators of plans to raise about $110 million of capital through a public stock offering.

The offering would mark the third time in as many years that the $3.5 billion-asset thrift and its previous parent, Citadel Holding Corp., have tapped investors for substantial infusions of capital.

A recapitalization and public stock offering last year raised $108 million from some of the country's savviest bank and thrift investors, including Michael Price's Mutual Series Fund, and Harry V. Keefe Jr.'s Keefe Partners.

So far, the money has failed to turn Fidelity Federal around. As a result, the Glendale, Calif.-based thrift could face a difficult sell with its coming offering, investment bankers and stock analysts said.

"Let's just hope that three is the prize," said Charlotte A. Chamberlain, a stock analyst with Wedbush Morgan Securities. Fidelity Federal suffered heavy losses in 1993 and 1994 and expects steep losses again this year after posting a $1 million profit in the first quarter. The thrift's common stock, which sold for $5.25 a share last year, has recently been trading for around $1.50. In the new offering, Fidelity Federal plans to sell up to 27,500 shares of common stock at a price to be set. Shareholders will be given the right to invest in the new offering before other investors.

Fidelity Federal also aims to raise capital by selling an option that would give another company the right to buy it. …

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